SENIOR EU OFFICIAL: Brexit means the City of London could be stripped of a €930 billion daily business

European Commission Vice-President Dombrovskis addresses the European Parliament in Strasbourg Reuters/Vincent Kessler One of the European Union's most senior officials in charge of the financial services sector has warned that one of the City of London's most important roles could be stripped away thanks to the vote for Brexit.

"One is financial stability. There are questions related to the enforceability of swap lines between ECB and Bank of England if the UK is to move out of the jurisdiction of the European Court of Justice.

"And there is also a question of functioning of financial markets, basically of avoiding fragmentation of the financial markets. It's a complex issue which we'll need to assess," he continued.

Clearing houses in London manage credit risk, acting as a middle-man in swaps and derivatives trades to guarantee the contract in the event that one of the parties involved in the trade goes bust.

The acceptance of English law and widespread use of English language has made London a hub for clearing globally, and it handles more than 70% of the daily euro clearing business, equivalent to around €930 billion (£792 billion, $995 billion) of trades per day, according to a House of Lords report.

During his interview with City AM, stressed the position that the EU isn't looking to "punish" Britain for leaving the bloc, saying: "We have to respect the choice of British voters, and as I said we will certainly the enter the negotiations with the aim to reach agreement which feeds all: which feeds EU 27 and feeds the UK."